Think about it, what business couldn’t benefit from more
revenues, more cash, and more stability? Business owners can very easily find
themselves distracted by the lure of “more sales.” Sometimes that is just what the business
needs. And sometimes, it just isn’t. The reality is that more sales does
not always equate to more money.
As Coaches/ Mentors we admit that I have the advantage of
perspective, having worked with dozens of clients on this very issue. We have
seen what works and what doesn’t and it’s our job to try to get the client to
find the path that works. We start by digging a little deeper into what the
client really needs, because often, the frustration they presume to be dealing
with isn’t really the frustration that’s causing all the problems.
Let me give you an example. One of my clients told me that
she desperately needed more sales. She and her partner had been working
really hard in the Mentoring Program; they were developing systems,
implementing innovations and cranking through the development of their business,
but it wasn’t working for them - at least their efforts were not turning into
immediate profits. In fact, they were working longer hours, spending more
time worrying about cash flow and they were starting to lose control over the
business as a whole. They were confident that the problem was the result of not
enough sales. They wanted to discuss how they could ramp up their leads right
away.
So, we explored their frustrations in greater detail, and it
became clear that it really wasn’t a sales issue they were facing. The reason
they were spiraling out of control wasn’t because of a lack of intention…it was
a lack of attention to the right aspect of their business.
Instead of focusing on sales (or more specifically, their
lead generation and lead conversion systems) we turned our attention to their
financial management systems. They’d already started the Testing and Measuring process,
and were beginning to track the flow of information that arises in the normal
course of business—invoices, purchase orders, cash register tapes, bank
deposits, and lease payments—all of the things that captured the movement of
money into and out of their business. But they’d yet to organize or analyze
that information in any meaningful way. And when we did that, we found our
answer.
They were working themselves into the ground not because
they didn’t have enough sales, but because they simply weren’t profitable in their per unit sales. And
no matter how you slice it, more sales will not suddenly make you profitable. More
sales would only have increased their cash flow for a few days, but the long-term impact would have
been devastating to their business. In fact, when we looked at the numbers, any
significant increase in sales could have ruined them by the end of that
quarter.
When in Doubt, Dig Deeper
The bottom line is that the root of your business frustration is not always what and where you think it is. It’s important that you pull yourself out of a tactical reaction when confronting a challenge, and instead approach it strategically. Because every area of your business is connected, what you’re experiencing might merely be a symptom in one area (Lead Conversion for example) of your business, when the real cause of the problem is in a different area (Cash).
Business Workout
Now, we want you to get in a little business exercise.
We want you to practice this strategic thinking. Here are three steps to follow when confronted with a
problem in your business:
1- Explore
the big picture. What is the real impact this frustration has on you, your
employees, your customers and your business?
2- Then
quantify anything and everything that might be a result of this situation.
Whether its lost time, productivity, lost revenue... every frustration is
ultimately costing you money.
3- Keeping
the first two steps in mind, observe the frustration objectively. Avoid blaming
people, and instead, focus on the systems. Walk step-by-step through the
sequence of events until you’re able to dissect what’s really going on. You’ll
probably identify areas that can be improved with system implementation right
away.
Team Work Helps
Once you have cultivated this skill within yourself, you can then teach this skill to everyone in your organization. Get them to track their frustrations. Get them to see what isn’t working. Meet with them regularly to get them thinking about a system that could fix the underlying problem, and then hold them accountable for developing that system. Just imagine what your business could achieve if everyone, at every level of the business, could solve one frustration every month.
Shift Your Thinking
Without the correct thought process, you can expect the same
frustrations to keep popping up again and again. Remember: every frustration
you have in your business is due to the lack of an effective system, but first ‘drill’ down to find the real cause. With this perspective, you might
discover that sometimes you need more sales. And sometimes, you’ll discover
that what you really need is a solution to a much larger issue.
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